FICC Focus

High yield corporate credit had a strong 1H, despite rates volatility, as spreads rallied and defaults stayed low. In Europe, the index default rate stands at 0.85% and the share of stressed and distressed bonds has come down, while it's higher in the US. Will 3Q sustain those gains, and why? Listen to Mahesh Bhimalingam, Bloomberg Intelligence's Chief European Credit Strategist, discuss the results of the 3Q High Yield Survey, along with market outlook, with Peter Aspbury, Head of European High Yield and PM at JP Morgan Asset Management.They discuss the BI 3Q investor survey report, which covers investor positioning, sentiment, key return drivers, default and supply forecasts and relative-value opinions by geography, rating and sector. They also discuss how high grade and leveraged loan prospects compare with junk.

Bloomberg Intelligence's Ira Jersey and Huw Worthington discuss the impact of global elections on bond markets. They delve into US congressional partisanship, French and UK elections' volatility, and the implications of the US Presidential election on trade and geopolitics.

Audrey Childe-Freeman, Bloomberg's chief G-10 FX strategist, and Nathan Dean discuss US politics' impact on the dollar before the Nov. 5 elections. They explore effects of a second Trump term on fiscal and monetary policies. The podcast dives into potential impacts of the upcoming election on the dollar, Fed independence, and market assets.

US Supreme Court Justice Brett M Kavanaugh would have a “great career as a restructuring professional,” according to University of North Carolina at Chapel Hill law professor Melissa B. Jacoby, as his Purdue Pharma 54-page dissent mirrored many bankruptcy lawyers’ skepticism regarding the US trustee’s arguments. In this episode of Bloomberg Intelligence’s State of Distressed Debt podcast, part of the FICC Focus series, BI bankruptcy litigation analyst Negisa Balluku interviews Jacoby, author of the new book Unjust Debts, on the impact of the Supreme Court’s Purdue decision on mass tort bankruptcies, including lingering questions about the future significance of consensual third-party releases (6:45). Earlier in the podcast, BI’s Phil Brendel and Noel Hebert discuss how the corporate credit market appears immune to geopolitical risks that don’t alter rate expectations. This episode concludes with all three discussing the latest developments in bankruptcy courts and distressed situations, including Incora, Gol Airlines, Mallinckrodt and Diamond Sports (50:15).

A lot has changed in the world of munis over the past 40 years, but don’t take our word for it. Joining hosts Eric Kazatsky and Karen Altamiranoon the June edition of Masters of the Muniverse is Joe Mysak of Bloomberg News, retiring this month after 40-plus years of covering public finance. In this month’s episode, we discuss Joe’s storied career at Bloomberg, how the muni marke thas changed and what to expect for the second half of the year. To help us bid him farewell, we’re also joined by a few special guests.

Watching the household survey portion of the Employment Situation report may be a better indicator of the economy, Stuart Paul of Bloomberg Economics says on this edition of the Bloomberg Intelligence FICC Focus Podcast. Paul joins host Ira Jersey, BI chief US interest rate strategist, to discuss recent economic data trends, the disconnect between surveys and hard data, upcoming data and the BE outlook for monetary policy. Paul says he believes US Federal Reserve Chairman Jerome Powell may be somewhat dovish at the semiannual monetary policy report to Congress, and could use the Jackson Hole symposium to signal a September interest rate cut.

Penny Foley, MD of EM at TCW, and Damian Sassower discuss EM carry, election risks, foreign positioning, growth dynamics, and central-bank policies in the changing EM landscape. They explore EM sovereign stories, idiosyncratic carry strategies in Asia, Latin America, and Eastern Europe, EM corporates, and recent election outcomes in South Africa and Mexico.

Diversification, lower default rates and elevated yields are just a few of the features of today’s collateralized loan obligation (CLO) landscape, says Senior Managing Director and Head of Structured Credit at Pretium Jerry Ouderkirk. He joins Bloomberg Intelligence analysts Noel Hebert and Sam Geier on this episode of Credit Crunch to discuss the asset class’ current state and its evolution over nearly two decades. The dialog touches on what backdrops drive primary vs. secondary market allocations, default expectations, loan and CLO dynamics, among other topics.

Citadel and MFN competing to fund an unsecured junior DIP financing was just one of the "remarkable" aspects of Yellow Corp's ongoing bankruptcy, according to its Chief Restructuring Officer Matt Doheny. The North Country Capital's founder and president sat with Bloomberg Intelligence's (BI) Phil Brendel to share his philosophies on distressed investing, derived from a wide-ranging career in law, finance, and politics. They dive into two of the most fascinating bankruptcy cases of our time -- Yellow Corp and FTX (5:30). Prior to that, Phil and Noel Hebert of BI discuss the high yield market's strength despite some serious headwinds presented by a "higher for longer" environment. The podcast concludes with BI's Negisa Balluku joining Noel and Phil to tackle the latest developments in bankruptcy courts and distressed situations, including Red Lobster, WeWork, Rite Aid, Diamond Sports, J&J, Yellow, Rackspace, Genesis, and FTX (49:50).

Federal Reserve Chairman Jerome Powell and the Fed are conflicted on economic data, says Morgan Stanley’s Global Head of Marco Strategy Matt Hornbach in this edition of the Bloomberg Intelligence FICC Focus Podcast. Hornbach joins host and BI Chief US Interest Rate Strategist Ira Jersey to discuss the G3+ central bank, currency and interest-rate outlook. Though the totality of recent US economic data has been very confusing, Hornbach thinks a clear trend will soon emerge. The Morgan Stanley base case is for the Fed to start cutting rates in September and do so at each meeting until mid-2025 before stopping. Such an outcome would cause the 10-year Treasury to rally to 3.75%, he said.